Tuesday, 22 October 2024
The Minister of Water and Sanitation, Ms Pemmy Majodina, has commended uMngeni-uThukela Water for its recent positive AA+ rating by Fitch Ratings, attributing this significant achievement to prudent financial management and strong leadership at the KwaZulu-Natal water utility. This is the second year running that the Water Board has scored a AA+ credit rating since its reconfiguration in 2023.
In granting the AA+ rating to uMngeni-uThukela Water, the London-based international ratings agency noted that the water utility had a stable financial outlook. This is ascribed to a strong and solid partnership with national government which meant that there was effective oversight over the institution’s operations.
Fitch also indicated that the water utility remained on course to meeting its borrowing limits and loan repayments for the 2024/25 financial year. A higher rating means that, should it need to do so, uMngeni-uThukela can borrow at a lower interest rate which augurs well for financing large scale water infrastructure development and
maintenance projects.
Minister Majodina said: “Along with Rand Water in Gauteng, which had also received an AA+ rating from Fitch’s, uMngeni-uThukela had shown that with the right discipline and adherence to sound governance principles, state-owned entities can balance their developmental mandates with prudent financial management”.
The Minister however expressed concern that the high levels of water losses and infrastructure implementation delays posed a risk for uMngeni-uThukela Water’s long term credit rating. “While we welcome the positive credit rating of uMngeni-uThukela Water by Fitch Ratings, it is extremely concerning that among the risks that could pose a risk for the future sustainability of the organization is high water losses at municipal levels. This is one area that continues to be a major concern for us as the Department of Water and Sanitation and which is receiving our immediate attention”, said Minister Majodina.”
Minister Majodina said that the report represents an expression of confidence in the ability of the South African government and the Department of Water and Sanitation to ensure the ongoing financial viability of the water utility.
ENDS
ISSUED BY THE MINISTRY OF WATER AND SANITATION AND UMNGENI-UTHUKELA WATER
